BMI View: We have a moderately positive long-term outlook for Germany's insurance sector, with lowsingle-digit growth rates expected across both major segments. The market's mature nature means thatpremium growth will largely track GDP growth over the next five years. Ordinarily, a market this maturewould provide few opportunities for new entrants; however, Germany's market has a very large number ofplayers and is highly competitive, indicating that there is scope for consolidation via merger andacquisition activity.Key Updates & Forecasts

- We have revised down our forecast for growth in the life sector this year, to 0.6% for 2016, from 1.2%previously. However, the long-term outlook remains positive, with gross premium growth of 1.6%expected in 2017 and then a gradual acceleration to 2.2% in 2020, in the absence of major sector (orwider economic) shocks. An ageing population, innovation in product development and a large pool ofcapital all underpin prospects for growth largely in line with GDP growth, during the majority of ourforecast period.

- Accounting for 54% of total premiums written over 2016, non-life insurance is expected to outperformlife insurance in terms of growth potential over the next 5 years. From a low of 2.1% growth in grosswritten premiums in 2016, we expect a gradual acceleration in sector growth throughout the forecastperiod, to 3.5% in 2020. Reflecting continued gyrations in the USD/EUR rate, returns in dollars are likelyto be much more volatile.

Summary The UK travel insurance market declined by 12.3% to £625.4m in gross written premium (GWP) in 2015. This is a result of fewer policies being written, in addition to rates that have been prevented ...